A company behind what is billed as Canada’s first commercial shale oil play near Joffre hopes to line up a multi-year licence to tap into Red Deer River.
Calgary-based Vesta Energy Ltd. is already using Red Deer River water for fracking in the company’s oil operations in what is known as the Joffre Duvernay Shale Oil Basin.
Water is pulled from the river under temporary diversion licences approved by the Alberta Energy Regulator.
“In an effort to consider the potential cumulative effects of long-life projects and to provide sufficient regulatory certainty, Vesta is now submitting an application for a multi-year water diversion licence,” says the company in an information leaflet.
The company intends to withdraw directly from the river and from a nearby gravel pit that naturally fills with water by the river. Vesta is seeking approval to draw about six million cubic metres of water annually.
The energy regulator says it has accepted Vesta’s application and it is under review. It aims to process applications within 130 business days, it says.
Applications are judged on their impact on existing, potential or cumulative effects on household and agricultural users and other water licence holders.
The impact is reviewed of withdrawing the water on the aquatic environment, public safety and water supplies. As well, an assessment of alternative water sources and the adequacy of First Nations consultation are weighed.
The Explorers and Producers Association of Canada named Vesta top private emerging producer in its 2018 awards.
The company has amassed 325,000 acres in shale oil land since 2011 and has identified 10 billion barrels of oil in place. The company’s 82 wells were producing about 12,000 barrels of oil equivalent per day at the end of 2018.
Water needed to support the company’s operations will be taken out of the Red Deer River just west of Penhold. It will be transported to where it is needed by flat hose and booster pumps. Longer term, Vesta will consider a permanent underground pipeline.
In an email on Wednesday, the company says it forecasts 15 per cent of its water needs will be met by produced saline water from its operations.
“Vesta is also actively pursuing a series of water conservation strategies, including maximizing the reinjection of produced water, working with municipalities in the region to access wastewater streams through mutually beneficial agreements, and continually improving operational practices to maximize water use efficiency,” says the company.
In support of its application, Vesta hired consultants to gauge its impact on the environment.
“The results determined that the requested diversion would not impact availability of fish habitat or water availability for downstream water users,” says the company.
Red Deer River Watershed Alliance is aware of Vesta’s application, but has not reviewed it in detail and cannot comment on the specifics, said Rosemarie Ferjuc, outreach and communications manager.
The environmental group says that key considerations must include taking into account the cumulative effects of new developments on the environment, balanced against the need to safeguard the City of Red Deer’s water source.
Water licence applications should not be looked at on an individual basis, but in the context of existing licences and potential future demands, she said.
The group says since Vesta does not plan to return any of the water it uses to the river, the company is encouraged “to undertake additional research into the proposed implications of water withdrawals on this reach of the Red Deer River and the potential to use alternative sources of water …”
This story was updated with further detail from Vesta on Jan. 23.